Bargain Sale To A Charitable Organization

AAA

DEFINITION of 'Bargain Sale To A Charitable Organization'

The sale of a good or service to a charitable organization for less than the fair market value of the good or service received.

Bargain sales are often used by donors who wish to make a charitable donation to an organization in a form other than cash. In some cases, the property transferred is exchanged for other similar property of lesser value, and the difference is considered a gift.

INVESTOPEDIA EXPLAINS 'Bargain Sale To A Charitable Organization'

If the property being sold has appreciated in value, the cost basis must be divided proportionately between the portion of the property that is actually sold and the remainder that is donated. The gain on the portion of the property that is sold must then be reported as income. The donation portion is written off, within the limits of charitable contributions for appreciated property.

RELATED TERMS
  1. Fire Sale

    Selling goods or assets at heavily discounted prices. Fire sale ...
  2. Distressed Sale

    When property, stocks or other assets are sold in an urgent manner, ...
  3. Sale

    1) In general, a transaction between two parties where the buyer ...
  4. Private Foundation

    A charitable organization that, while serving a good cause, does ...
  5. Qualified Charitable Organization

    A nonprofit organization that qualifies for tax-exempt status ...
  6. Proof of Charitable Contributions ...

    Substantiation required by the Internal Revenue Service for a ...
Related Articles
  1. Cut Your Tax Bill With Donor-Advised ...
    Taxes

    Cut Your Tax Bill With Donor-Advised ...

  2. Deducting Your Donations
    Taxes

    Deducting Your Donations

  3. Gifting Your Retirement Assets To Charity
    Retirement

    Gifting Your Retirement Assets To Charity

  4. The Top Nonprofit Organizations
    Taxes

    The Top Nonprofit Organizations

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center